Socio-Economic Determinants of Home-Based Informal Businesses: Evidence from Sibi, Balochistan

Abstract

This paper explores socio-economic conditions that have contributed to the booming home-based informal businesses in Sibi, Balochistan. The research design was a mixed-methods approach to collect data from 150 local informal business owners to determine which of the following factors are their key motivators, the economic impact of their businesses on their households, the business challenges they face, and their readiness to formally register. The results show that the primary drivers of these unregistered businesses are economic hardship, high unemployment rates, and a severe shortage of formal job opportunities. Moreover, such ventures are mainly initiated by women seeking a flexible, income-generating venture that can work around household chores. Although these micro-businesses are providing the much-needed supplementary income, as most of them earn between PKR 10,000 and 20,000 per month, they are, to a large extent, survival tactics, rather than growing businesses that provide a source of livelihood to others. The barriers to entrepreneurship are high and include limited access to formal bank loans, insufficient business training, and extremely complex regulatory procedures. Although most respondents were in the informal sector to avoid bureaucratic red tape and taxation, a vast majority indicated a strong willingness to formalise, provided the government offered less red tape and more readily available institutional support. The conclusion of the study is that simplified registration, accessible microfinance and specific skills development should be implemented to promote sustainable economic integration.